February 16, 2006

Brazil and the WTO again

Posted in Uncategorized at 2:14 pm by thelawthoughts

Promote the Progress has a very interesting post on Brazil’s IP policy here. J. Matthew Buchanan, always insightful, discusses the distinction between a country enforcing IP rights positively in foregin policy and Brazil, which is threatening to ignore IP rights, or use them negatively, as it were.

People have a go at developing countries for ignoring IP rights, but there is a very good reason they do so. After a recent decision against the US, in which the WTO found their cotton subsidies illegal, the US for a time refused to comply. If you were Brazil, wouldn’t you be asking yourself why you should comply with your WTO obligations when others were not?

What connection, then, does this refusal on the part of the United States have with IP? The ability to IGNORE positive rights is one of the only weapons that developing countries have. Whereas a country like the US uses ENFORCEMENT as a weapon and negotiation tool, developing countries of course do not, because US corporations have lots of IP and Brazilian ones do not. They instead use non-compliance as that negotiating weapon.

People seem to think that ignoring the rules is more reprehensible when a developing country does it. Usually they threaten on drug patents and those sorts of public health issues, and usually for good reason as well as there being some political grandstanding. However, it is just as bad for the US to whinge about a failure to enforce obligations when it refuses to comply with its own. Why shouldn’t a developing country use every weapon it has, when developed countries won’t respect the rules either?

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6 Comments »

  1. I agree with you about each of the parties using their relative threat points in negotiation. That’s how the game is played. Nothing wrong with that.

    However, while the US paying subsides to farmers is wrong in temrs of international trade it’s not as bad as theft. Which, essentially is what is going on when a country chooses not to enforce IP rights or another other property rights.

    If you want to use this as a negotiation technique you can however it will severly stunt technology transfer and long term growth.

    It’s not a single move game as they say in the GT lit. All actions in this round affect the next rounds.

  2. Interesting and I have a couple of quick comments before I return to the stack of work on my desk (ahhhh escapism of blogging!).

    1. Whenever somebody talks about failure to enforce IP rights as theft, I always ask “what is the IP holder losing?” Is it really theft? My big interest is medicine patents and I ask specifically, is it theft if the beneficiary of the failure to enforce was never going to purchase anyway?

    2. Whenever somebody talks about IP enforcement and growth I ask (1)”growth for whom (IP holders) and on what basis should we allow the beneficiaries of that growth blanket enforcement of their rights?” In other words, why shouldn’t there be some balance between out and out growth which benefits rich shareholders and growth which allows half-dead people to generate some productivity of their own? (2) the link between blanket IP enforcement (as opposed to allowing some balancing exceptions) is not really proven (well, I don’t think anyway, but I could be making a misstatement. If I am, I apologise).

  3. Oh – and I forgot to talk about my other original point, which ties in nicely with your game theory – why should those who suffer under IP enforcement bother, when they don’t see the benefits of IP holders adhering to THEIR WTO obligations?

  4. Ok I’ll respond to your last comment here and put the rest on my blog as I can see it getting quite large.

    The holders of the IP (US Companies) HAVE NOT WTO OBLIGATIONS!!! These are private firms, not governments. Treating the US Govt. and US Companies as the same player is poor model design and will lead to incorrect analysis.

    Hmmm I’ll try and do some GT analysis of this a bit later this arvo and see what I come up with. I can best figurer there are 4 players in this game.

    Oh one more thing. Notice how we use different words for the same thing. I say steal, you say ignore property rights. It’s one of those irregular verbs. I ignore property rights, You pinch, he steals… Sorry, just thinking of Yes Prime Minister… funny stuff.

  5. Just very very quickly – when writing on your blog, don’t forget that whilst IP holders are generally not treaty parties, their governments have in effect signed them up for particular obligations and are obliged to have national laws in line with those WTO obligations. So, IP holders are in theory bound by the rules governments agree upon.

    I think it is important to remember if you are going down that path.

    Also, I know NOTHING about game theory, so you won’t get any answer from me on those points!!!!

  6. My post is up. Have a read, sharpen your pencil and comment back.


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